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Bankruptcy brings Obama officials to Detroit next week

WASHINGTON — Obama administration officials who have been working to develop a response to Detroit's fiscal crisis will travel to the city Sept. 27 to meet with community leaders, nonprofit executives and elected officials.

Bankruptcy brings Obama officials to Detroit next week

At least 3 administration officials will meet with Detroit, state leaders.

Gene Sperling, shown in May 2013, is director of President Obama’s National Economic Council and point man on the response to the crisis in Detroit. He'll be part of the meeting.(Photo: Charles Dharapak, AP)

Story Highlights

Detroit filed for federal bankruptcy protection July 18

It is the largest municipality to declare bankruptcy in U.S. history

Bankruptcy court has a hearing Oct. 23 to determine whether the city is eligible to file

The meeting — which is expected to include Michigan Gov. Rick Snyder, Mayor Dave Bing, emergency manager Kevyn Orr and others — is part of a continuing series of discussions that White House officials are holding to ensure existing federal resources are available to support local priorities.

Gene Sperling, director of President Barack Obama's National Economic Council and point man on the response to Detroit's financial crisis, will be part of the meeting. The administration also is sending Housing and Urban Development Secretary Shaun Donovan, Transportation Secretary Anthony Foxx and U.S. Attorney General Eric Holder.

"We're going to continue to support the efforts under way in Detroit and ensure the federal government is an active partner in supporting the revitalization of the city," Sperling said. "This effort is about lifting up Detroit and committing to a shared, long-term investment that will enable the businesses and residents in Detroit to expand opportunity and renew this world-class city."

Members of Michigan's congressional delegation also are expected to take part. No other details were immediately available, but attendance is expected to be by invitation only.

"They want to make sure the city's not leaving behind anything in existing programs or resources that could be repurposed for the restructuring effort," said Orr's spokesman Bill Nowling. "It's welcome news."

Bing said in a statement: "Unlike the auto industry, we certainly can't expect the federal government to provide a bailout for Detroit. However, it is important that the Obama administration recognizes Detroit's need for help."

Snyder officials would not confirm the meeting in Detroit.

“This effort is about lifting up Detroit and committing to a shared, long-term investment that will enable the businesses and residents in Detroit to expand opportunity and renew this world-class city.”

Gene Sperling, National Economic Council

But Sara Wurfel, Snyder's press secretary, said: "We're having ongoing conversations and dialogue ... about targeted ways the state and federal governments and the city can work and partner together to harness resources, programs and opportunities to assist Detroit."

News of the meeting comes amid a flurry of discussions in Washington about a federal response to the Detroit bankruptcy filing, the largest municipal bankruptcy in U.S. history.

A federal bailout effectively has been ruled out, and administration officials have said they won't interfere in legal discussions between the city and its creditors. But the White House — at the urging of Michigan's members of Congress — has been meeting with business leaders, officials from charitable organizations and political leaders to determine how best to ensure that available federal aid — like existing grants — gets to Detroit.

A week ago, Sperling, Donovan and others met with labor leaders, including presidents Bob King of the UAW and Lee Saunders of the American Federation of State, County and Municipal Employees. Saunders has been a sharp critic of the possibility that public employees in the city could lose pension benefits because of the bankruptcy.

On Aug. 30, White House officials met with Chief Executive Rip Rapson of the Kresge Foundation, Quicken's Dan Gilbert, Debbie Dingell of the Wayne State University Board of Governors and others to discuss ways they could leverage federal aid and coordinate efforts from nonprofits and business to spur development and ensure that investments are well managed.

"I think what's terrific is that the White House has shown a keen interest in being part of the revival of the city," said Matt Cullen, president and CEO of Gilbert's Rock Ventures enterprise that oversees his Detroit investments. "They've shown a real interest in understanding the challenges in the city."

Rapson said Thursday that the White House "has been trying to get an inventory of ways they can be helpful."

He said he was aware of plans for a Sept. 27 meeting and expects to attend but said the invitation list was still in flux. For example, it is unclear now whether Congress will be in session and whether members of the Michigan delegation will be available.

Next Friday's meeting brings with it the chance to bring many of the parties together for a frank discussion — one unlikely to include any announcements of large pools of money for Detroit. From the start, the talks have been about leveraging existing streams of aid — including government grants.